Following a two year public consultation process, the Central Bank of Ireland (the "CBI") published an updated Outline of the Administrative Sanctions Procedure ("ASP") in November 2013. The new Outline of the ASP provides a detailed insight into the investigation phase and largely reflects the CBI's current practice. Further detail is provided as to the different options available to the CBI upon conclusion of the investigation process, including issuing a supervisory warning, taking supervisory action, issuing a notice of inquiry, or referring the matter to settlement.

Of particular interest will be the guidance provided on the settlement procedure. The settlement procedure, which is conducted on a 'without prejudice' basis, runs in parallel with the investigation which is conducted by way of open correspondence. The CBI expects a regulated entity to admit the contravention(s) and to provide full information in response to questions raised in the investigation letters before a settlement meeting will be scheduled. Generally the CBI will not consider the settlement procedure option once a Notice of Inquiry has issued.

A new feature of the ASP is the Early Settlement Discount Scheme. While the CBI had previously indicated that it would impose a lower sanction where a matter was settled at an early stage, this scheme introduces a standard process whereby a maximum percentage discount of 30% on the proposed fine can be achieved if the matter is settled during the period prescribed by the CBI. Prior to the settlement meeting, the CBI will notify the regulated entity of the sanction which it proposes to impose. The terms of settlement will be agreed in writing at the settlement meeting and a public statement on the matter will be issued by the CBI thereafter.

The updated Outline of the ASP also notes the CBI's reporting obligations to prosecuting or disciplinary bodies. It also sets out the procedures that may apply where a suspected breach of a designated enactment or statutory instrument could give rise to either a prescribed contravention or a summary criminal prosecution. As stated in its Enforcement Strategy 2011-2012, the CBI's policy had always been to pursue prescribed contraventions pursuant to the ASP in preference to bringing a summary prosecution. The CBI's current policy, as set out in the new Outline of the ASP, is that it may decide to pursue prescribed contraventions through the ASP instead of bringing a summary prosecution. It will consider the circumstances of each case on its merits and may decide to pursue matters which constitute both a prescribed contravention and a criminal offence via the criminal courts.

The Regulatory and Investigations Group at Matheson frequently advise financial service providers and individuals under investigation by the CBI, including advising on strategy and fair procedures, responding to document requests, drafting submissions and advising on the settlement process.  We work closely with Joe Beashel of the Regulatory Risk Management and Compliance Group to ensure that any compliance issues highlighted by the CBI are remedied to avoid future enforcement actions.  Further detail on the new ASP guidelines is set out in the Regulatory Risk Management and Compliance Newsletter – February 2014.

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